Demonetisation: Assault on the People

Monday 26 December 2016

by Ram Puniyani

The month-old gamble of Narendra Modi (November 8, 2016) has put the whole country in an unprecedented chaos. The demonetisation of 86.4 per cent of the circulating currency in the form of Rs 500 and Rs 1000 notes has put into jeopardy the life of major sections of society. Nearly seventy people (now the figure has crossed 100) have died in the queues to withdraw the money from banks/ATMs. The daily-wage workers have to lose their daily earnings to withdraw the cash, many daily-wage earners had to go back to their villages for lack of work, the small trade has been damaged severely, farmers are neck-deep in trouble while probably those holding ‘black money’ don’t have to suffer such an ordeal. The 80 per cent of estimated black money is stashed in the overseas tax heavens; roughly 15 per cent of such wealth is in the form of real estate, gold and shares etc. Only five per cent of money is in the form of currency notes. It is for this five per cent quantum that 86 per cent currency has been demonetised and millions of people, who barely make their two ends meet, have been put to such a massive inconvenience.

The impact of this is that the hard-earned money of the peasants and common people in the cooperative banks, agricultural credit societies, housing societies and so on has been frozen by a single stroke. The agricultural-rural economy is close to paralysis. The massive loans of corporate houses have been labelled as ‘bad loans’ and have been waived off. All these expose that the true intention of this assault is not eradication of black money, but to unleash a social engineering for draining away the meagre earnings of the common people into the coffers of corporate billionaires through the banking system. This move has the full backing of those who deal with black money or those corporate giants who stand to benefit as their loans are being waived off.

The response to this has been very diverse. Most of those standing in long queues have expressed their opinions though their life and sweat, while a few among them have also praised the effort by saying that in the long run it will be better for them. Most of the Opposition parties, though disunited, have vehemently criticised the move of the government. Prominent economists and a substantial section of the media have scathingly criticised the move of the government. The critics of the Modi policy, as usual, are being labelled as anti-nationals. Baba Ramdev, the fellow traveller of Modi politics used the word ‘deshdrohi’ (anti-national) and the RSS-groomed Devendra Fadanvis, the Chief Minister of Maharashtra, used the word deshvirodhi (against the nation) for these critics. The large section of those suffering from Modi mania, despite their discomfort, are holding that it is a good move. Their delusion is that in the long term the system will be better and they will benefit. Modi launched an app to conduct the survey to show that the people’s opinion is with him, while a few surveys are showing growing resentment against this move.

It’s no mystery as to why this step has been undertaken. Two major Gujarati papers had carried the news of demonetisation several months ago. Many are arguing that it is to cripple the Opposition parties in the forthcoming elections in UP and Punjab in particular. The idea is to reduce the campaigning capability of the Opposition parties. There are reports that the BJP has bought lots of real estate just prior to demonetisation. The problem of ‘bad loans’ given to the corporates are being aimed to be solved through the public funding for corporate giants via the banks, with the help of the massive deposits which is the goal of this move.

Modi’s campaign for power in 2014 was built around the promise of acche din and bringing the black money from overseas banks and then depositing of Rs 15 lakhs in everybody’s account. The social scenario has worsened abysmally during the last two years. The prices of commodities went sky-high during this period. Tur dal has shot up from Rs 60 to 150 per kg. Despite the drastic fall in the prices of crude oil in international market from $ 119 per barrel to $ 30 per barrel, the petrol price in India has come down only from Rs 67 to Rs 60. Corporates like Mallya have made merry by running away with huge debts. This along with the non-realisation of boastful promises like the rupee becoming stronger vis-a-vis the dollar are nowhere in sight. The agrarian crisis has been worsening. With demonetisation the production in the unorganised sector has come to a near halt. It seems Modi, taunted by the Opposition and critics on his boastful promises, now wants to claim that so many efforts are being done in this direction. As such the major area of non-taxed money remains untouched. There is a push towards cashless economy whereas a large number people seem to be unprepared for that.

During the last over two-and-a-half years, the so-called fringe elements of the RSS combine, Modi’s ideological base, have become bolder and thrown up non-issues, identity-related ones in the public domain. These emotive issues, which took off from the Ram temple-Babri mosque dispute, have been joined in by issues related to the Holy cow, beef, pseudo-nationalism of Bharat Mata ki Jai, abolishing the autonomy of educational institutions, creating a growing atmosphere of intolerance leading to the return of awards by eminent writers and social workers. It is these that have come to the fore. The deeper issues related to poverty alleviation, employment, malnutrition, health and matters pertaining to agrarian crisis have been buried under the weight of pseudo-nationalism. This hyper-nationalism has also worsened the state of affairs in Kashmir and relations with our neighbours, Pakistan and Nepal in particular.

This seems to be a move which will benefit the corporate world and is creating a huge suffering for the average people. The propaganda, ‘this will benefit us’, has been created with a great amount of success. But can this deceptive propaganda win over the reality for long?

The author, a retired Professor at the IIT-Bombay, is currently associated with the Centre for the Study of Secularism and Society, Mumbai.